Y Combinator's Lowe Pushes Cause of `Little Tech' After Google Fight

(Bloomberg) -- When California Governor Gavin Newsom vetoed a bill regulating artificial intelligence companies last month, many people in Silicon Valley rejoiced. Some of them also quietly thanked a man 3,000 miles away in Washington — Luther Lowe, the head of public policy for Y Combinator.

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Young tech companies usually can’t afford high-power lobbyists, but in hiring Lowe a little over a year ago, startup incubator Y Combinator recognized that most of them could use help in government. Lowe’s job is to advocate for the startup industry as a whole, a role that includes everything from Capitol Hill meetings to orchestrating a California pressure campaign around the controversial bill to regulate AI models, SB 1047.

Powerful figures like Nancy Pelosi and Sam Altman lampooned the AI legislation, but YC’s campaign was particularly influential, says Nichole Rocha, a tech policy advocate at Rocha Public Affairs, who watched the issue closely. “It’s not unusual for big tech companies to get involved to fight a bill, but when the community of startups gets involved too, that’s really different,” Rocha said. “It’s the first time I’ve seen it in my career.”

Y Combinator runs an incubator for about 500 startups per year, with alumni that include giants like Airbnb Inc. and Stripe Inc. Lowe views his mission as fighting for “little tech,” a phrase popularized by YC Chief Executive Officer Garry Tan, and now broadly adopted by venture capitalists. Soon after he announced Lowe’s new job last year, Tan warned startups: “You may not be interested in politics, but politics is interested in you.”

The fight against Senate Bill 1047 was one of the most high-profile startup policy fights in recent memory. The bill called for measures to prevent AI companies from wreaking catastrophic harm, and would have held the makers of AI models directly liable. Viewed as potentially stifling a foundational technology, the rule was widely reviled in the tech world. To make the case against it to lawmakers, Lowe combed through the list of YC companies and asked potentially affected startups to contact the California State Assembly Committee on Judiciary, voicing their opposition.

Lowe also invited every AI founder who lived in the San Francisco district of the bill’s sponsor, California State Senator Scott Wiener, to come to an event at YC’s San Francisco headquarters in late July. More than 100 founders showed up to lambast the proposed law at the event, which was attended by high-profile officials including Federal Trade Commission Chair Lina Khan and Assistant US Attorney General Jonathan Kanter.

Lowe then wrote up a report based on the discussion and made sure it was widely distributed in Sacramento. “Most of the founders in attendance were constituents of Senator Wiener, hailing from San Francisco and running AI startups directly impacted by the proposed legislation,” he wrote in the memo, highlighting startups’ concerns.

Despite the efforts, the bill still passed the 80-member assembly in August, while 31 members voted no or abstained. Lowe then urged Tan to send a letter to Newsom urging him to veto it, and outlining the key reasons. Tan obliged on Sept. 26. When Newsom vetoed the bill days later, his letter of explanation included many of the concerns aired during Lowe’s event, including the bill’s lack of flexibility.

“I like to think we had a big impact on that (veto),” Lowe says.

As a representative for early-stage companies, Lowe’s job is to care about a range of issues including regulation and antitrust, which govern what startups can and can’t do and who can buy them. “Tech is not a monolith,” Lowe said. Often, startups’ goals diverge from tech giants’. Historically “little tech was being misrepresented by the largest companies that have very narrow self interest,” he said.

As the general election looms, Y Combinator’s Tan has thrown his support to Kamala Harris. The position stands athwart some in the venture capital industry, who have vocally embraced Trump this election cycle. For example, VC Marc Andreessen called Trump the best candidate “for little tech.” Lowe, who first met Harris in 2008 and supports her candidacy in a personal capacity, said he will work with whichever side wins. At a recent YC event, Lowe and top Harris adviser Brian Nelson held a fireside chat, where Nelson said startups would have a seat at the table in a Harris administration.

Lowe, 42, grew up in Arkansas, the son of teachers. Every summer, his parents sent him to Washington to visit his grandmother, who worked for former Senator Robert Byrd, and his grandfather, a former aide to Senator William Fulbright. “They would put a little clip-on tie on me, and walk me around the Capitol,” Lowe recalls.

He studied at the College of William & Mary in Virginia, where he led a fight to let students vote in local elections. He said this inspired a career-long “love of David-Goliath fights.” He joined a then-young business-review company, Yelp Inc., in 2008, moving to San Francisco.

In 2011, Yelp went public and Lowe made some money — enough to pay off student loans and pull together a down payment for a house. But it wasn’t nearly enough to allow him to retire, he says, and he eventually moved back to DC. “There is an alternative universe where I could have just moved to Sonoma, gotten a vineyard, and disappeared,” Lowe said, referring to a typical cash-out path taken by people in Silicon Valley who strike it rich. “I’d much rather not have ‘FU’ money, and be in the fight, and doing interesting stuff.”

At Yelp, Lowe found himself at the center of a contentious corporate battle. Yelp argued that Google, which had previously tried to buy it, was elevating its own results for restaurant reviews in its search results. Lowe fought to make sure lawmakers in the US and Europe heard from the smaller company. Today, the issue is ongoing: In August, Yelp sued Alphabet Inc.’s Google for alleged anticompetitive behavior in local search.

Tech giants like Google and Meta Platforms Inc.’s Facebook have some natural advantages when it comes to politics. Not only are they economic juggernauts, but they employ large numbers of lawyers and lobbyists in Washington who work to advance their goals.

Working with startups can be lonelier. The National Venture Capital Association runs an office in DC, but startups and venture capital firms have only started accelerating their advocacy efforts in earnest over the last few years. Startups’ goals can also be contradictory: They don’t want the largest tech players to become so successful they crowd out smaller companies, but they also want big, successful tech companies to be able to buy them, providing more opportunities to profit.

Ideally, Y Combinator is hoping for a system in which, “Instead of having a gun to your head, with one offer, you have four or five willing acquirers,” Lowe says, echoing comments made on X by Tan last year. “That’s a stronger system.”

Today, Tan says Lowe’s work is raising the profile of startups among politicians, particularly in Washington. “The worst is when regulators or lawmakers don’t even know what is happening on the other side of the country,” he said. “If YC can speak for startup, there will be more of them.”

In one case, Lowe advised a startup called UpCodes on how to push back against a bill in the US House of Representatives. “The bill was certainly aimed at killing UpCodes,” said the startup’s chief executive officer, Garrett Reynolds, who said he didn’t realize how serious the situation was until he discussed it with Lowe. Ultimately, the bill failed on the House floor. “I have no doubt it would have passed the House without his help,” says Reynolds, who has since hired a lobbying firm.

Even with Lowe’s and Y Combinator’s assistance, many startups will still end up hiring their own help on the Hill. YC alum Arianna Galbraith, who went through the program earlier this year, found that she increasingly needed assistance navigating government agencies at her startup, Oma Care, which aims to secure paid compensation for family caregivers. When it came time to hire a lobbyist at Oma Care, Lowe sat in on Zoom meetings with candidates, and provided advice on who really did have ties to the right bureaucrats.

“A lot of people say they have relationships, but to know how deep and strong those relationships are — only Luther knows,” Galbraith said.

DC can be a tough place for a young company. “If you’re an engineer and you’ve built a beautiful service, and you walk into Washington and you say, ‘Hey, I need a lobbyist,’” Lowe says, “You’re a sitting duck for people who persuade you to buy the platinum package.” Most startups don’t need bells and whistles like former cabinet members on their payroll, he said, but it helps not to go it alone.

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